United shares drop after airline reports lower 1Q profit

DALLAS (AP) — Shares of United Airlines' parent dropped sharply on Thursday after the company reported lower first-quarter profit and gave a disappointing outlook for the second quarter.

Chicago-based United, the nation's No. 3 airline by traffic, reported after the market closed Wednesday that first-quarter profit fell 38 percent to $313 million.

Oscar Munoz, who became CEO in September but just returned from a heart transplant and five-month medical leave, said United would not concede anything.

Chief revenue officer James Compton said United was prepared to reduce capacity, a method airlines use to increase fares by reducing the supply of seats.

United's international routes are being hurt by rising competition from foreign carriers who have flooded the market with flights.

Southwest CEO Gary Kelly said Thursday that his airline is doing just fine in Houston, where it has been expanding domestic routes and recently added international flights.